Why Michael Kors Is on the Verge of Buying Versace

Why Michael Kors Is on the Verge of Buying Versace

Versace to be sold to US label Michael Kors for $2bn, sources say

Shares dropped Monday on reports that the US-based designer of affordable handbags is eyeing a $2.35 billion acquisition of Italian fashion house Gianni Versace.

Rumours of an IPO have resurfaced since the company sold a 20 per cent stake to private equity giant Blackstone in 2014.

The deal would give Michael Kors the ability to "properly compete with Kering's power brand, Gucci", explained Allday, noting that the consolidation in the fashion creates risks of for smaller brands that stay independent "of being left behind" and unable "to afford the exposure" of a bigger company.

London-based Kors previous year snapped up shoemaker Jimmy Choo for about £896 million pounds (NZ$1,77 million), expanding beyond its namesake brand.

"Why just WHY would you sell Versace to a brand like MICHAEL KORS", says another.

The stark difference between Michael Kors and Versace has some fans revolting against the rumoured deal on social media.

Why Michael Kors Is on the Verge of Buying Versace

The move is in line with the US brand's ambition to aggregate various luxury brands - including fashion, shoes and accessories - under one larger group. Versace is of course one of the most recognizable and beloved high-fashion outfits in the world.

Donatella Versace and her brother Santo Versace have helped run the company since their brother Gianni's murder in 1997.

Michael Kors and Tiffany could not immediately be reached for comment. A spokesman for Blackstone had no comment. Past year the American company acquired Jimmy Choo for $1.2bn. CEO Jonathan Akeroyd stated that the group boasted sales of $760 million in 2016 and turnover is expected to exceed by more than a billion in the "short term".

Versace had planned to float the company on the stock market but put the plans on hold owing to unfavourable conditions. In a tribute to Gianni, Donatella Versace brought back the most iconic looks from his collections spanning the 1990s, including silk blouses mixing leopard prints with images of baroque architecture.

Models present creations at the Versace show during Milan Fashion Week earlier this month.

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